Apart from determining the type of supply, it is also essential to understand the concept of place of supply and value of supply under GST. GST is a destination based tax. This means that the tax is collected in the place where the buyer receives goods or services. The state where the delivery of service and/or goods takes place will get to collect GST. There are different tax rates and slabs under GST. Knowing the place of supply, helps to decide the right tax that one should charge on the invoice. It also helps to determine the type of levy i.e. whether one should charge CGST, or IGST or SGST.
A. Place of Supply for Goods
In case of goods, the place of supply is where the goods are delivered i.e. where the ownership of goods changes. In the case of no movement of goods, it is the location of goods at the time of delivery.
When someone assembles and installs the goods at a location, place of supply is the location of installation. For example:
B. Place of Supply for Services – the location of the service recipient.
In the normal course of business it is possible that someone provides services to an unregistered dealer. In case, their location is not available, the location of service provider will be the place of supply.
pecial provisions for the following services:
- Services related to immovable property
- Restaurant services
- Admission to events
- Transportation of goods and passengers
- Telecom services
- Banking, Financial and Insurance services.
Services Related to Immovable Property –
When services are provided at an immovable property, the location of the immovable property is the place of provision of services.
If one cannot determine the location of supply, one will have to determine the same following the Parliament’s rules on the basis of GST Council’s recommendations.